Fermi IPO: Shares of the startup that wants to build a Trump nuclear power plant have begun trading

Preliminary trading in shares of Fermi, a real estate investment trust (REIT) founded in early 2025 by former U.S. Energy Secretary Rick Perry, has begun on the Freedom client trading system. The startup expects to capitalize on the AI boom by attracting large data center operators to its electrified Texas site. Later Wednesday, the securities will appear on the Nasdaq under the ticker FRMI.

Fermi raised $682.5 million on Nasdaq by placing 32.5 million shares at $21 per paper, closer to the upper end of its stated price range. That brought the fund's capitalization to $12.46 billion, Reuters calculated . Lead bookrunners were UBS Investment Bank, Evercore ISI, Cantor and Mizuho.

Initially, the fund planned to sell 25 million shares, but on September 29 increased the volume of the offering to 32.5 million. The price range remained the same - from $18 to $22.

Fermi has leased a 2,100-hectare plot of land from the University of Texas for 99 years and is inviting hyperscalers there, promising to build huge power plants to supply electricity for AI data centers. By 2038, the foundation expects to reach a capacity of 11 gigawatts - five times the output at the Hoover Dam. The power will come from natural gas-fired power plants, the Donald Trump Nuclear Power Plant, as well as solar panels and battery storage. Fermi plans to have up to one gigawatt of natural gas-fired capacity online by the end of 2026, and to have the first of four reactors at the Trump nuclear plant up and running by 2031, Barron's writes.

Although Fermi is structured as a REIT - a format traditionally characterized by high dividend payments due to significant cash flows - the company's management says that due to large-scale investments, no dividends will be paid in the near future. However, this is unlikely to scare off investors who believe in Fermi's long-term potential against the backdrop of skyrocketing energy demand from AI data center operators, the publication notes.

Fermi was founded in January 2025 by former Texas Governor and former U.S. Secretary of Energy Rick Perry along with venture capitalist Toby Neugebauer. The leased site is located near a large natural gas field and natural gas pipelines owned by Energy Transfer and ONEOK. Fermi has signed a memorandum of understanding with Energy Transfer, whose board of directors includes Perry, to use the pipeline and is negotiating access to capacity with ONEOK. Fermi says it already has contracts for new gas turbines with Siemens Energy and used equipment with GE Vernova.

Fermi currently has no revenue: the fund has spent $6.4 million by June 30, 2025, according to the IPO prospectus. The company warned that it will "continue to incur operating losses for the foreseeable future" and probably won't start generating revenue from tenants until 2027. To date, the fund has raised $246 million in convertible debt financing, as well as funds to purchase turbines.

While many companies are trying to build power plants for data centers, there are virtually no publicly traded peers with a business model like Fermi's, so determining its fair value is difficult, Barron's notes.

Timm Schneider, founder of analyst firm Schneider Capital, said that Fermi's valuation in the middle of the stated price range looks overvalued with an eye on 2026, but could be justified with a long-term approach - if the company reaches its EBITDA target of $3.6 billion by 2029. At $20 per share, that translates to an EV/EBITDA multiple of 7.4, a value familiar to the energy sector, the analyst said.

Having financing, long-term leases and access to natural gas pipelines are serious competitive advantages, according to Patrick Johnson, a partner at law firm White & Case who specializes in energy. "When you go through all those items on the checklist, they're all positive," Johnson stated.

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Freedom clients will be able to get access to Fermi shares before the opening of the main exchange session in the United States. Trading will begin in an early pre-market format 2-3 hours before the U.S. exchanges open (15:30-16:30 Astana time). To participate click on ticker FRMI.US

This article was AI-translated and verified by a human editor